M-Trex Corporation Sdn Bhd - 2009 Credit Commentary Report

MARC has downgraded M-Trex Corporation Sdn Bhd’s (M-Trex) RM48.0 million Islamic Commercial Papers (ICPs) rating to DID from MARC-3ID arising from its failure to redeem RM30 million of the Notes due on May 7, 2009 by way of conversion into a term loan as planned earlier. Concurrently, MARC removed M-Trex’s rating from MARCWatch Negative where it had been placed on February 24, 2009 to highlight this heightened refinancing risk.

Contrary to our earlier expectations in our last rating action on February 24, 2009, M-Trex was subsequently unable to complete its refinancing of the outstanding ICPs ahead of its May 7, 2009 maturities. The underwriters/noteholders had earlier agreed to refinance the RM30 million ICPs via a term loan, subject to the balance RM18.0 million of the ICPs to be repaid by way of disposal or refinancing of some of the group’s assets.  M-Trex eventually failed to raise sufficient funds for the redemption of the RM18.0 million ICPs maturing May 21, 2009.

M-Trex is an investment holding company with interests in the manufacturing and sale of anodised surface treated panels for audio and video equipment, and the trading of replacement and consumable parts for the automobile and semi-conductor industries.